Illegitimi Non Carborundum

July 6, 2015

Obamacare Premiums Exploding, Affordable Care Act Not So Affordable

Remember Obama’s promise that a family would save $2500 in premiums under Obamacare? Another lie to get the bill passed.

The sad part about this whole situation is that many of the people under Obamacare Health Insurance are people who had a perfectly good insurance policy that they liked at a much lower cost. But the government said, oh no we are not going to let you keep that policy because it isn’t up to our standards. In other words it didn’t provide everything under the moon.

What if we had just given the needy a healthcare insurance voucher and left the rest of the people alone?

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

In their submissions to federal and state regulators, insurers cite several reasons for big rate increases. These include the needs of consumers, some of whom were previously uninsured; the high cost of specialty drugs; and a policy adopted by the Obama administration in late 2013 that allowed some people to keep insurance that did not meet new federal standards.

“Healthier people chose to keep their plans,” said Amy L. Bowen, a spokeswoman for the Geisinger Health Plan in Pennsylvania, and people buying insurance on the exchange were therefore sicker than expected. Geisinger, often praised as a national model of coordinated care, has requested an increase of 40 percent in rates for its health maintenance organization.

Essentially, what the insurers are claiming is that those getting insurance for the first time are sicker on average than people who already had insurance. But this is somewhat counterintuitive. We know that many people chose not to have insurance precisely because they were young and/or healthy. Could the average of this pool of people really be increasing usage to such an extent as to be the prime reason costs have gone up?

Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies in the form of tax credits to help pay premiums.

Now we get to the truth, or at least part of it. A big part of the reason premiums have to be so high is because of income redistribution. Because many people aren’t paying for their own insurance (another name for it is “subsidies”), the people who are paying have to pay not only for themselves, but for other people (including illegal aliens). That’s a big part of the reason premiums are so high.

Another big part of the reason for the high premiums is the Obamacare tax on insurance companies, more than $8 billion a year and rising rapidly, to pay for all the political commissars who set prices and run our health care system (as well as redistribution). This tax is not truly borne by insurers, but is passed on to you in the form of higher premiums.

A third reason for the high taxes are because of all the required mandated coverages. Coverage is now required to cover people without any dollar limits on coverage. Most people don’t need $1,000,000 in coverage, but those who do make insurance much more expensive for the rest of us. Insurance is also required to cover children in their 20s (even if you have no children, you pay for others who do), some kinds of abortion, and other medical procedures you may not want or need. In the old days, people could pick plans that had coverage that suited them. But now, in the era of Obamacare, you have fewer choices about coverage.

It’s almost as if you once had the choice to buy access to the four or five cable channels you watched on TV, but now, you are required to buy access to 40 channels and pay the cost of them, even if you still watch only five of them. That’s another reason why Obamacare is so expensive.

Why didn’t insurers cite these factors to explain why costs have increased? Because the government has its boot on their throats, and they know if they complain, they will be ruined. That’s why they need to raise rates but can’t talk about their real underlying reasons for doing so.

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THEN THEE ARE THE $6000 DEDUCTIBLES TO GO ALONG WITH THE HIGH COST OF PREMIUMS. THIS HEALHCARE INSURANCE SHOULD BE CALLED THE UNAFFORDABLE CARE ACT.

Think about what happens when a person in the lower economic strata has to pay the first $6000 of his health care costs. For the average person that is like not having any insurance at all for that person rarely will have $6000 in health care expenses in one year. So who is kidding who?

And what happens when the subsidies are phased out? Here’s what will happen. Millions will refuse to purchase healthcare insurance and we will be right back where we started from, except those still with insurance will be paying double